Tuesday 12 April 2016

Help!

Hi everyone! I survived the move and will write a more detailed post in the coming week but I need some advice.

We didn't have 20% down to purchase this house so we had to pay CMHC insurance - this was rolled into our mortgage. Now the Crown pays for CMHC insurance - but it is a taxable benefit. We received a cheque from the lawyers office yesterday for $3250.00 to cover our CMHC fees. This money doesn't have to be used to pay CMHC, it's ours to do whatever we feel right - I've checked and rechecked, the only thing that we were constantly reminded of is it will be taxed at the end of the year. So my question is: do we put it on our mortgage - which we are on track to pay off in 18years and have a 5yr fixed rate of 2.89%? Or should we roll it into my spousal RRSP so G gets the tax benefit this year? Or should we go on a vacation (lol jk).

We are leaning towards the RRSP since it'll have more time to compound and we are comfortable with our mortgage amount.

Any opinions?

- M

4 comments:

  1. I'm not sure I understand the Crown paying the fees piece but I would be inclined to put it towards rrsp's if your e-fund is healthy enough to cover any issues that may come up in the new house.

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    1. Yeah - our Emergency fund is $5,000 and our moving/house fund is a healthy $11,000. If anything comes up (and we have planned a few things already) I'm confident we can pay it all in cash.

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    2. I would go for RRSP option since you don't need the cash and it will reduce the income tax on the benefit.

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    3. Thank you for your reply! This is exactly what we did :)

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